>> in search of consensus. biggest gains after the month. a deal. one week to go ahead of the u.k. elections. boosting education. can he hold onto his lead in the polls? good morning, everyone. good evening depending on where you are in the world. welcome to "bloomberg surveillance."

these are your markets. there seems to have been the u.s. saying they will remove the threat in china, which is why we have seen a little bit of moves. awaye exactly seven days from that election. opec meets in vienna, brent crude at 62.91. moncler, really the stock of the day after that report that kering, the owner of gucci, was interested in buying moncler. they do jackets for the winter, skiing jackets now turned into fashion. that stock price has gained 9.2%. moncler at 42.40 two. coming up, we talk all things fx. it thing or two to say about the pound. we will also talk about emerging markets. let's get straight to the bloomberg first word news in new york city. we begin with fiscal

stimulus. japan's government pulling out all the stops. tokyo announcing measures to support growth as the economy contends with an export slump and the fallout from the sales hike. we have learned the total package amounts and is expected to boost growth by 1.4%. an unexpected hold in india. r.b.i. keeping its benchmark rate unchanged. headline inflation breaches its medium-term target. the central bank retaining its accommodative stance, signaling hikes are still off the table. over to france. that is where labor groups representing transport workers, lawyers, and doctors are all going on a strike. the unions a pro -- oppose president macron's plan to restructure the system. guide,ory is any

pensions will not be easy to reform. the antitrust probe facing amazon is expanding to include its cloud business. we have learned that they have recently asked about it. the ftc and amazon declining to comment. about theg held potential tie up. the owner of gucci had preliminary discussions with the ski wear maker, but no decisions have been made. moncler shares surging this morning. powered by more than 2700 journalists and analysts. this is bloomberg. francine: oil holding onto most of its biggest surge. is trying toforce persuade its partners to defend

prices. the kingdom is willing to raise output. , they will lead their way in deepening the cuts. let's go to bloomberg's manus cranny. what is the biggest risk to markets? risk is a lot of rhetoric and under delivery. you just outlined what i would say to you is the biggest bluff of its cause, which is saying to everybody, get on board, comply, do what you promised to do and if you don't do that, iraq, nigeria, russia, we are going to do more in terms of production. time he is int charge, the first time that he is the saudi oil minister and he wants an outcome which is strong, definitive.

they are going to make cuts more than codifying. i would say it is about delivering. charge, it is my role here, the king is dead, long live the king. it is my rules and my game. thecine: the concern from suppliers that are not part of opec, what do they do with that? there was a wonderful word being used in the stories over the past couple days, glutted. i'm talking about the amount of additional supply that will come to bear on the market in 2020, not just from the u.s. permian. there is a debate that u.s. shale could bp shale going into 2020. think the non-opec countries that do have plenty of supply. you look at the amount of

non-opec supply. the is going to bust out kind of record you have seen from non-opec over the past 40-50 years. from.s., to your point, the u.s., they turned net exporters for the first time in 70 years. a lot of oil to come on the market. francine: thank you so much. manus cranny at those opec meetings. joining us this morning, our guest, one of the experts when it comes to oil, oil dynamics, and the companies associated with it. how hard is it for opec to influence the price of oil right now given the non-opec? >> it is a good question. u.s. shale is going to continue to grow. next year, we are going to see more production at the doorway. some other non-opec countries.

supplier tomarginal the extent they want to be. influencing the price of oil, they are still able to do so. you say something and you would literally look at the bloomberg terminal. it is another wildcard. out and bee to come more definitive about, we are going to be in more compliance going forward or even the outside chance that they extend the current production cut , i think that we will see oil markets move to the upside a fair amount. because theyging have more skin in the game? >> we talked about a little bit of a blah for saudi arabia trying to play hardball, but the

other countries also know that saudi aramco is about to become public any minute now. clearly, saudi arabia, the kingdom, once the ipo to be well received. they wanted to trade well going forward. saudi arabia has always been biased toward higher prices and now even more so. francine: if there was a sweet spot and i know it is a range. russia exceeding a lot of output quota, which is difficult to control, but if it is in the same range between 55 and 65 or are they targeting 70? >> if there is a range, it is between 60 and 70 for opec broader. some countries would certainly prefer a much higher number. saudi arabia can make do with a lower number, but they want to balance their state budget and that is the sweet spot. francine: are you expecting cuts and that agreement? >> we are expecting the current agreement to be extended through the end of the year. that is our base case.

that would be extended another nine months and 1.2 million barrels per day. i think the real thing to watch is how did the countries actually comply with that agreement? does saudi arabia just go more toward compliance? or do iraq and nigeria, countries that have been a little bit under compliance, do they come into compliance? francine: what can saudi do to get more in line? [laughter] >> it is the big question. i think saudi arabia being the marginal producer, they have arguably the largest impact to oil price swings and being able to threaten their production levels to move oil price down as a threat to others is the key thing that they have in order to keep prices in line. francine: we know there is a lot of local demand. will that actually brought now to international investors? >> we understand that the ipo itself is oversubscribed.

bankers are leaning toward a pricing near the high-end of the range. i think all of that is setting up to go well. we have had a pretty good week of crude oil prices so the momentum is generally good. too think the ipo is going go well. as it relates to other international investors, they will keep a key i on it, particularly how saudi arabia is going to be governed going over it and even more to the extent that it is listed by the london exchange. francine: how soon could that come? we all saw the top end about $25.6 billion. what if it doesn't go right? how delicate would that be? >> i think it is a very delicate situation. i think if it does not go all that well, i think we will start to see saudi arabia look to ask why it is not going well. is it because of the governance?

potentially, things are changed as it relates to transparency. francine: when you look at peak oil, saudi aramco mentioned peak , is that too far or too soon? >> that is the million-dollar question. is peak oil supply based on demand or is it more of a supply issue? we think crude oil demand is going to continue to grow between now and 2040, though that demand growth is going to be typically less then what we have historically seen due to electric vehicles coming in and displacing some of the internal combustion engine vehicles. francine: thank you so much. ask about the u.s. producers and how much their supply will grow in 2020. stay with us. plenty coming up. chinese officials are in close contact with the u.s. we will discuss the prospects for a trade deal. off inin moncler kick

news of a potential deal with kering. we will bring you our scoop later. this is bloomberg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance." the u.s. and china are getting closer to a deal. that despite tensions over hong , democratic presidential candidate elizabeth warren spoke out over president trump's tariffs in an interview with joe weisenthal. >> the president has no plan. trade is about tariffs. it is not just about tariffs.

trade is about regulation as much anything else. what i want to see is a coherent plan for anybody who wants access to american markets. francine: joining us now to talk about tariffs, talking about gdp for 2020, the main concerns, the chief investment officer at london capital. brian is still with us. thanks for sticking around. welcome to the program. when you look at trade and you look at the mixed signals from other insiders saying we are close to phase one, president trump or a cold water saying he is not worried about timing -- how should the markets behave? >> they should completely and utterly ignore mr. trump's words. he does have a plan, but the plan has nothing to do with trade or tariffs, it has to do with winning elections. -- he knows hew needs to be tough so he can project himself as the white

knight protector of u.s. interests surrounded by countries trying to take advantage of them. he also knows he cannot push things too much so the markets begin to worry because voters also vote with their wallets. but i suspect is that he will be -- you might have this phase one, but it will not be super meaningful. over the next six months, the situation could potentially become very uncertain. i think that once we get a bit closer to the elections, he will want to stage some sort of relief rally and accelerate agreements with china. is notnot forget there strong conviction coming from trump as far as trade is concerned. everything he does or says or even has administration does when it comes to trade needs to be looked at from the prism of what is more likely to help me win the election. francine: brian, you are not

expecting a recession in the next 12-18 months. >> i do think that to your point on trade, it is a little bit of give-and-take. if we did get a trade deal, that would be a little bit of a boost to gdp growth. francine: is it still an indicator of impending recession? be one of the first signals? is a firstthink oil indicator, but it is an indicator. lowid see gdp growth globally. our call was for oil demand to increase by one million barrels per day. we have been sub one million barrels per day, primarily due to the trade war. francine: how much are you expecting the oil price to increase? >> we have a forecast for brent between $60 and $70, jen really

a little bit higher that -- generally a little bit higher than where we are at. francine: in the past, you would have a price hike and he would risk a slowdown. that does not seem to be the case. >> economic activity certainly is driven by industries which are by the nature of them dependent on commodities. also, it seems as if the price of oil gets a bit more dictated by the supply side of things as the demand side of things. demand had been stable. considerations about the potential of supply, excessive supply, the potential for countries doing whatever they -- because of that, the link between oil and global activity. it tone: how difficult is

have a good handle on that market? >> it is challenging and over the past couple years, we have seen 2 million barrels per day added just from the u.s. alone record for any country. however, the u.s. producers, partly because of the lack of access to capital, they are slowing their production activity. capex will be less than 2019. our sense is a pretty wide range for u.s. production growth. what would make that change? clearlysion could impact the amount of production in the u.s. next year. i think overall, a lot of producers looking to see what the actual price of oil is. it probably leads it to be at the higher end of that range. francine: thank you both. both stay with us. coming up, another luxury

megadeal. kering, the parent company of gucci, reportedly in talks with the company moncler. this is bloomberg. ♪

this is "bloomberg surveillance," i'm francine lacqua in london. france,oups striking in

going on indefinite strike. it threatens to bring the country to a standstill. the unions are opposing president macron's plan to reform pension plans. if history is any guide, pensions will not be as easy. still with us, our guests. is france formable? -- re-formable? >> i don't think so. it is a country whose dependency on public spending is the highest of any developed country. the french, credit to them perhaps, are very vocal about that. they believe that it is their ultimate right. unfortunately, we live in a world where having excessive liabilities, these these pension and health care not preparing the

country for further growth. there is a limit to what can be done. they have attempted and failed. macron is -- attempting it and also failing. francine: france is one of the first times were we saw social unrest because of attacks on fuel. brian, overall, given the shift to renewables and climate change into greener planet, is there still value in oil stocks, majors? >> we definitely think so. there is a bit of a shift as it relates to the majors and that has historically focused on production and growth and how much we can grow production. now, it has shifted to how much free cash flow and how we can allocate that capital. a fair amount will go toward capex, but companies are looking at dividends. to the extent share prices don't

recover, stock buybacks will be part of the game. francine: thank you you both for joining us. up, did fiat underestimate the value of its american business i over 5 billion euros? that is the claim from italian authorities. we dig into the details of that. we have a little bit of m&a in luxury with the gucci owner holding talks for a deal with the ski where maker moncler. this is what the markets are focusing on. they are focusing on a little bit of them in day -- m&a. then potential he removing terrified's on chinese imports. dollar edging lower. this is bloomberg. ♪

francine: in search of consensus, oil treads water ahead of today's opec meeting

after the biggest surge in over two months. we are live in vienna. vonlear shares of john exploring a deal -- one week ago ahead of the u.k. election, boris johnson's promised to cut taxes and boost education. with yourk in european stock movers with dani burger. dani: you just mentioned montclair. let's check the share prices, up or they 9%. its highest price on record if it keeps this up. deal witha potential taking over montclair. these are preliminary talks, according to people familiar. even though we are seeing a read across the entire luxury sector, burberry being one of them, shares up over 3%. there is a lot of m&a in the space. look for these shares to continue to be affected by the m&a stories.

falling byg shares almost 4%. they are a flagship fund to u.k. property fund investors, pulling assets to such a degree, that g had to freeze assets. francine: dani burger with the main stock movers. did fiat underestimate its 5erging business by over million euros? are joined by camacho are the grounds on this what and what does it mean for fiat? >> good morning. to our viewers. the italian tax authority is claiming that fiat undervalued

billion.ler unit by $5 when chrysler moved to the headquarters away from italy for the first time. in this move, fiat chrysler had to pay an exit tax. , they are claiming $5 billion. potentially fiat could have to pay as much as $1.5 billion in extra taxes. fiat is denying any sort of miscalculation. and they are also saying they do not expect this to have a material impact on them because in theve so many country, so they can offset the eventual payment by credit that they have. this is clearly another sort of

hurdle, fiat in the final days of negotiation with peugeot, to merger with peugeot. we understand there is a deal that will be signed probably before christmas. we know there are 100 people between peugeot and fee at executives working to reach a -- and fiat executives working to reach a deal. another issue that is coming on the table. we also have to say that our -- that peugeot is fully aware of and no one will delay or harm the deal. francine: thank you so much. let's get to the bloomberg first word news in new york city here's viviana hurtado. president in saudi arabia will use a carrot and stick to persuade its opec partners. that is if other producers keep failing to meet their targets.

the potential reward for complying, riyadh will lead the way. the chief executive says opec cannot defend prices. >> i do not believe that opec has the capacity to defend price. global demand and global supply -- if demand is weak and global supply of oil continues to grow, we will have a low price. viviana: an unexpected hold in india, the r.b.i. keeping its benchmark rate unchanged. none of the economists surveyed expected a cut. the central bank is signaling heights are still off the table. to the u.k., a week before the election, boris johnson making a raft of promises. if he wins, he says he will deliver brexit and a taxcutting budget in the first 100 days. the labour party says johnson's

conservatives have had what it cost 3500 "days of failure." global news 24 hours a day, on air and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries, i am viviana hurtado. this is bloomberg. francine? francine: democratic presidential candidate elizabeth warren says she is no enemy of capitalism, but the u.s. economy is working better for the rich than for regular americans. senator warren spoke with joe weisenthal. sen. warren: part of the rules are that everybody is supposed to pay their fair share on taxes so we can reinvest it, in opportunity for all of our kids. that is what a two cent wealth tax is about for me. so the short version of a wealth tax is this -- your first $50 million of accumulated wealth, free and clear.

but your 50 million and one $50,000,001 you pay a two cent tax on that. joe: you say you are a capitalist. who saye probably many otherwise. and there are a rate of billionaires, that if elizabeth warren is elected president, the stock market will plunge 20%. i don't put much stock in that. under your administration, with the stock market be something you care about? aboutarren: what i care is an economy that works for notches billionaires and millionaires, but for everyone. look at what has happened in america. stock market goes up, gdp goes up, unemployment is low. but what is happening to working families across this country -- it has been a generation with very little growth in income, but at the same time, families are squeezed for housing, for

health care, childcare, the cost of sending a kid to school. those are through the roof. so families take on more and more debt, they are squeezed harder and harder. by the way, that is part of why i want to see a wealth tax. because it is what we can do without wealth tax, how we can invest in an entire generation of young americans. thatmy technical question comes up is several billionaires with people over $50 million who have their money, a big part of it tied up in a liquid private stock. i see people in silicon valley talking about this with the wealth tax, and it applies to one of your rivals, our owner here. how do you levy a wealth tax of against someone who is tied up in a share? sen. moran: -- it will not be a

problem for me to have to sell off some of my stock. it is a problem may be for everybody else, but keep this in mind. , they pay america 7.2% of their total wealth in taxes. that would be affected by the wealth tax, -- the top .1% that would be affected by the wealth tax, their plain people to percent of their total in taxes. asking them to pay two cents more means they are still not carrying a fair share. francine: that was democratic presidential candidate elizabeth warren. michael bloomberg, the founder and majority owner of bloomberg, the parent company of bloomberg news, is also a democratic presidential candidate. let's talk about the u.s., the stock market. with pau morilla-giner. from london capital.

how much of a headwind are we going to see in the market in 2020? tommaso: i suspect -- pau: i suspect the market will be more focused on what earnings are doing. earnings in the u.s. are slowing down but not falling off a cliff. the danger for the u.s. economy, not that of a recession, it is that of a proper recession. quarters, youx could see in q2 of next year, for the first time in 10 years, negative year on year growth. an average company in the u.s. growing lesser earning than they did a year ago. participantsarket might not be, my god, this is the beginning of an end, but when we see a negative number attached to earnings, that could moree beginning of a

serious correction. i do not see anything stopping equity markets until we see ringing.bell francine: what happens if we don't get a trade deal before the election of 2020? i suspect market participants are also looking at political issue as a tool. i suspect that is in -- that it is an nobody's interest for the escalation to get worse. but it is also not in trump separate interest to get better, because if it does, he cannot put himself as a savior of the american worker. what we are doing is assuming that it is not an improvement but not a negative trend as far

as growth, and therefore we need equity markets. francine: thank you so much. pau morilla-giner from london & capital stays with us. montclair climbing this morning on news of a potential deal. we will bring you all the details. this is bloomberg. ♪

francine: this is "bloomberg surveillance." i'm francine lacqua in london. the megadeal between the pipeline, -- held exploratory looks at montclair. that send it -- that since it

surging this morning. the luxury goods analyst for bloomberg intelligence joins us. from pau morilla-giner london & capital. -- --of all, the still has 61% exposure to gucci. acquiringe looking at are looking atey expanding into similar categories. there is a huge amount of potential on both sides. francine: what is prompting this luxury m&a flurry he echo we had tiffany, which we also initially broke, being bought. is this the less independent

listed or not listed, the jewel companies being taken over? deborah: i do think there is immaturity in the markets for could be morehere exposure in e-commerce. it is a slow process for many. so mid-2020, we will be running this e-commerce alone, and that is one area where we think moncler can flourish. francine: there is so much going on. like these stocks? because they actually seem to know everything, where the portfolio is naturally hitched. pau: certainly we are converging to a duopoly or maybe an oligopoly of large companies,

everything having to do with social media and having a portfolio of -- i think it makes a lot of sense not just because of the reasons that we have been discussing in terms of needing ler,iversify, but also monc quite frankly, they are depending on china, they are depending on selling expensive jackets. benefit from having a bit of less competition. of course, the price of which, , it is incredible to where we were not that long ago. francine: you can see the share prices is going to 9.6%. lvmh, ibeing bought by always was told that tiffany had large margins. what would you do with moncler? moncler's margins are

in the mid 30's. high-margin, high operating margin. ,hy you are buying moncler where you think about where , the scale could take it to that level. ncler, ave this mo quarter of its q2 in terms of its size, its stronger period. that could hamper it a little bit. if it is -- it is not about margin. initially i think it is about topline growth and economics of scale, and from the caring side side,-- from the kering scale.d be having that we could see this around 13 billion. . that would be about 23 times ebitda, and we could see it

getting to that by selling out that stake in houma, which is still 15.7%. francine: deborah, thank you so much. morilla-giner stays with the he holdoming up, ken onto his lead in the polls -- can he hold onto his lead in the polls? this is bloomberg. ♪

francine: economics, finance, politics. this is bloomberg surveillance. unveiled aon has list of pledges he would roll out if he wins. funding, legislation on immigration would also be priorities. the opposition labor party issued a statement pointing back to nearly 3.5 thousand days of failure under him. says he isf london still campaigning for a win in next week's election. >> the polls are looking great for a labor victory, a labor

landslide. we saw in 2017 the polls were wrong, and we saw it getting closer. as an activist i am not going to therse every -- look, choice of this election is very simple, brexit back income austerity loving government, and brexit, johnson, hard possibly a no deal. now we know the terms of exit and do you want to leave in those terms or stay? accept that the polls are not good. i am hoping they are wrong again. we will see how it turns out. pau,ine: still with us, markets trust the polls because we saw a little bit of rally and pound. but are they wrong? pau: we don't know. be -- wearkets tend to

never learn when it comes to polls. believe they are pleasant, otherwise we get very unhappy. is hard brexit, no brexit, but what really matters for voters are pockets, and market participants are very concerned with a labor majority, which obviously will be detrimental to their economic interests. so i am not sure whether it is about the polls, it is more about the prospect of government affect the minds of activists investors. francine: how are you going into december 12? pau: we are going into december 12 with the expectation that things are going to get better. anything that is not a strong labor victory will be good. and it will not be good because

of the fact that we will get a brexit deal, because we will not and 12 months' time. we will again be talking about a hard brexit. but it will get better because the majority, with four years of horizon, it is not in johnson's interest to appear as tough as it has been. up until now, johnson has been -- getting brexit done, etc., i expect that the rhetoric will subsume because he will not have to reactivate that voter base or do i suspect it will be in nobody's interest to have another hard brexit discussion. francine: what happens, if there is a hung parliament, we will start having exit polls on that thursday night. his pound going to be very volatile? what happens the morning after? after, we haveg - hungparliament,

parliament, it has a very bad rap. in spain we have pretty much had a hung parliament, and one of the strongest growing economies. sometimes not allowing politicians to have a lot of say is actually good. they will do their own thing and you do not have changes all the time. francine: you could argue that has been having -- happening for the last three years. you need to deal with brexit. pau: i suspect having a hung -- will meanll be that pound volatility will be higher. but actually, even if we have what probably will happen, which is a tory majority, we might have six months of relief, honeymoon, but then soon enough, the cliffs of christmas 2020

will yet again be very near, and there is no way this time around , once the negotiation takes place with the u.k. outside of the block, there is no way that it will be constructive or willing to reengage in anything but a very tough stance. much.ne: thank you very in the next hour, tom keene, as always, joins me out of new york. we will be talking about all things fx with david bloom of hsbc. the focus is on trade, on stock market and what it will do in the next couple of months. we are looking to 2020, and kering holding talks on a deal to buy moncler. this is bloomberg. ♪

francine: in search of

consensus. ahead of today's opec meeting, the biggest surgeon over two months, we are live in vienna. moncler shares rise on the news that kering is exploring a deal. boris johnson pledges to deliver brexit, boost education, and cut taxes. but can he hold onto that? could morning and good afternoon. this is "bloomberg surveillance." i'm francine lacqua in london, tom keene in new york. markets are on the -- are quiet on the back of the u.s.-china trade. a lot of the focus is on luxury m&a with moncler being in the spotlight for kering. tom: you wonder if anybody can go it alone anymore. the moncler store is lovely here in midtown men happy. but it is an independent smaller -- in midtown. but it is an independent smaller

thing. francine: i don't know if i can see myself in moncler, what i can see is margins high. margins and jewelry. if you look at moncler, i think a lot of the items are about 30%. we will talk about leisure m&a. but first let's get to viviana hurtado. viviana: in vienna, oil ministers from the opec plus coalition on the agenda -- production cut back deal. the oil minister saying gulf arab states already agree they need to prolong the cuts. iraq is opposed to steeper cutbacks. the current agreement is in place until march. a week before the election, british prime minister orest johnson is making bold promises. he says -- boris johnson is making bold promises he says if he wins, in the first 100 days he will deliver brexit, a taxcutting budget. says his party days ofady had 3500 failure. democrats are hinting at the

charges they would bring against donald, including abuse of power, bribery, and obstruction. the judiciary committee questioning legal scholars about the constitutional and historical grounds for impeachment. the republicans argue the entire process is flawed. bloomberg has learned that investigators are now looking at amazon's massive cloud computing businesses. the agency and amazon declining to comment. global news 24 hours a day, on air and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in i amthan 120 countries, viviana hurtado. this is bloomberg. tom: thanks so much. i love what quicktake is doing. quicktake really describes the speed there, particularly on breaking news of that platform, for a younger, quicker audience. let's do a more mature, slow

data check right now. equities, bonds, currencies, commodities as well. futures up two days in a row. dow futures up 69. . better take yesterday a controversial article on china doing better toward a trade deal as well. i just have one screen today, francine. i need -- i know we need to talk euro-sterling. i will show that in a minute. francine: let's kick off with pound. it is driving again. expectations grow with victory in next week's election. we have a great opinion piece saying watch out if he doesn't, the dollar drifting lower. i put euro-dollar like you, 1.1090. tom: i missed that. in all this news flow, we must remember madame lagarde's first meeting at the ecb, i believe a day after the election.

euro-sterling -- usually i look at sterling-dollar. francine knows this so well. brexit out here with the euro strength, the sterling weakness, the great move, and this is the advent of prime minister johnson, and down we go with sterling, sterling, sterling. with this resistance here, you begin to encapsulate heading .75, .80 level. francine: actually, madame lagarde is speaking on the same day of u.k. elections. tom: excuse me. francine: oil holding onto the biggest surge in two months. there is the sign of a u.s.-china deal. the day.y chart of thanks to hilary clark, russia is exceeding its output for most of the year. that means saudi arabia either has to play tough guy or cut back on what they are doing

themselves. on trade, the u.s. and china are getting closer to a deal. both sides are moving toward agreeing to the amounts that tariffs should be rolled back. u.s. negotiators expect the save one deal with china to be completed before tariffs are set to rise on december 15 joining us now, the hsbc head of global effects -- global fx strategy. >> the u.k. is a world leader in the deal or no deal scenario. how many times have we heard that deal, no deal, 3.5 years later in the u.k., we're still waiting for an answer. hopefully we will get one next week, friday. i would not hold your breath thinking deal or no deal, which has been imminent since april this year. so obviously the word "imminent" means something else on the others of the pond. i would not hold my breath about the whole thing. francine: let's say we have a phase one deal. what does it move, renminbi?

david: i think we need a resolution to the situation. we have seen that. i think it is a step in the right direction, but there is a lot to get through. , the other thing that is coming along is the u.s. election. so there is a lot of hurdles along the way. willink dollar-renminbi drift up. know,ore than anyone i good morning, in 2019 you nailed the dollar stability, even dollar strength call. really did extremely well on that. can you reaffirm that for 2020? david: for the moment, i cannot see what to be chain breaker is. for the currency to move, what is happening german orders come out, they are negative again, and domestic orders were down 7.7%, the weakest since 2012.

where is this recovery? goingile, the u.s. is along quite nicely, the economy is doing ok, so what is to change? i need a gamebreaker, tom, and i cannot find it. tom: you have a spectacular chart on a fractured fx market. how fractured are the g10 major payers? david: well, i don't know if they are fractured, but they are doing nothing. at 1.10.dollar is i would not say they are fractured. it feels like a lump of glue stuck together at the moment. there is something else about that. voters owning the big boys, then people get involved in emerging markets, they get involved in carry trades.

it is an explosion eventually because it gets you involved in carry trades. it is good and some of these currencies, and it will get more people involved. francine: you cannot see a game changer, but there must be something that may happen. what if we get inflation wrong next year? david: we will not. what is going to happen? see where it gets you. i mean, come on. inflation test -- labor markets are taught, which they are. nobody wants to do it. i don't think that this inflation is coming. you know steve major has nailed this for 10 years in a roper he has 1.5 percent 10 year -- in a row. he has 1.5% 10 year bonds. tom: davis wound up here. he knows we are -- dave is wound

up here. i really want to say come as he majors -- mentions esther major, it is truly the major housecall. others with steve major looking at lower for longer, but nobody more visible has nailed it. you also mentioned hsbc's double digit equity call, 12 months ago. oh, they were alone on that call. we are thrilled with mr. bloom being with us. later today, david westin speaking with the chief executive officer of general motors. somehow electric automobiles and labor adjustment will come up. jobs day tomorrow. this is bloomberg. ♪

viviana: you are watching "bloomberg surveillance." let's get your bloomberg business flash. general motors and south korea's tochem will join forces build batteries in the u.s. ach company will invest billion dollars. they will be built in ohio. kering has held exploratory talks with moncler. kering is the parent company of gucci. it would help the company keep pace with lvmh, which just agreed to by tiffany. aickson close to resolving long-running u.s. corruption investigation. bloomberg has learned a deal could cause the -- cost the swedish telecom equipment maker more than a billion dollars the investigation involves potential bribery in six countries. that is your bloomberg business flash. tom: thank you so much. ofis oil, the microeconomics oil. one of the great truisms of oil,

usually unknown, is that the balance of supply and demand is a very, very narrow amount. it is always on supply in vienna, but this time around it is much more on the elasticity of demand. we bring in the elastic one, manus cranny in vienna, and joining us from dubai, matthew martin with us, our finance reporter in dubai. manus cranny, is this a demandnt vienna because dynamics are so front and center? manus: it is a very different demand -- a different vienna meeting. that is what the world is, glutted with oil or is not my objective opinion, but that of the iea. non-opec demand will soar next year. is, these guys and girls are going to do something to conjure that. the word we are hearing in the streets around me here, not in

the christmas market. it will be a tough decision, but we will have to -- manus: the point about it is, i get the sense society wants everybody to come aboard with cuts. for compliance, i should say. the size of those cuts, what they can deliver over the next 24 hours. francine: the concern is that they have more skin in the game now that they have the saudi aramco ipo. what price do they need for that to go well? will they do everything in their power to make sure that russia complies and saudi will have to cut? manus: you hit the nail on the head. they have a huge reputational the global markets.

it is about aramco. the most valuable company at home is going to be at home in saudi arabia. that is at the backdrop. the bigger issue is, the first opec meeting. the king has said come along live the king. he wants to set the tone. we are in charge, we will do more, but you must all come on board with compliance. we actually chased three ministers around vienna last night. not one spoke to us. the new rules of the game. francine: let's bring matthew martin, who has been covering the aramco ipo for us. we understand that aramco is set to consider the top end pricing for its ipo. how much will the success of this depend on the price of oil? moment, itll, at the is over 2.5 times covered, the latest figures. there are still a couple of days of book building since then, so

aramco is confident they will be able to price this offering at the top end. i think when we look in the context of the opec meeting, that is going to set the stage for aramco when it starts trading around a week's time. if we see something out of opec that lifts the oil price and that will be positive momentum for aramco as it goes into the first few days of trading. tom: if we have an ipo price somewhere in the chitchat that we have right now, what percentage decline do we need to see before international institutional steps? matthew: well, there are two things at work. from the pilot fishing exercise that aramco did when it marked in the ipo, most of the demand 1.3, maybe some

investors as high as 1.5. we will see aramco list at 1.7, so it would need a fairly dramatic decline to get some of those investors involved. the flipside is you have hedge funds looking at this and they will see a potential msci a conclusion -- inclusion happening in 10 to 15 days of the listing. that will encourage a lot of the passive funds. they will have to start buying aramco to get the tracking -- to avoid the tracking error. listing of see a aramco shares in the coming weeks. the hedge fund may be an easy bet to take, putting money on the table for a couple of weeks and cashing out on this msci outlet. tom: matthew martin in dubai. we await the aramco transaction. manus cranny freezing in vienna. glad it is you and not me. stay warm in vienna. all aramcoo follow

news as it breaks this morning. break, "bloomberg daybreak" with alix steel. bank of america, merrill lynch. this is bloomberg. ♪

tom: bloomberg surveillance, thrilled you are with us. kevin cirilli at the top of the hour, with the president, with a massive tweed storm yesterday, flying back across the atlantic david bloom of hsbc.

let's put out a chart. i will told is the david bloom chart. this is an approximation of oil adjusted for inflation over 60 years, and also adjusted for the fact that we are wealthier today. it includes some noise on u.s. rising disposable income. david, oil does not have the impact used to have. how is the distraction of oil weaker? how has it affected dollar dynamics? david: it hasn't really. oil prices arer basically inflationary because you are coming off high wages. you know the process. but now we have a different opinion. you use more disposable income to pay for oil. food, and energy. if you pay more for food and energy, you do not have money for anything else. demand goes down, oil price goes

down. so the trump mission mechanism of how many things work has completely changed. tom: what mr. bloom has said there, folks, is so important. the shift from a market analysis to a more economic analysis, the effect of oil. with that said, what moves dollar now? is it flows of capital or relative interest rates? david: we think it is not relative interest rates. a new piece talking about having some of these transmission mechanisms, how markets have changed. japan with a physical package, nobody cares. the market does not seem to care. same thing in india, same thing in south africa. the market and the way it views is undergoing a fundamental change as we sit here, and there is nothing different about oil. we have had the shell gas explosion in the sense of production, and demand is weak.

that is changing the whole dynamic. the world is changing. francine: the world is changing, opec's views are also changing. iran and the oil minister speaking with annmarie hordern saying that oil producers should bear the burden of making anymore cuts come also saying that he will support the opec majority decision. a reminder, a recap of what we had, the current deal between saudi arabia, russia, and the rest of opec, we call it opec plus, coming into effect in january. it was extended in june, now running to the end of march. in the current deal, iran and venezuela are exempted from the cuts. does this change your dynamic at all? if we have a cut extension or if this alliance between saudi arabia and russia falls apart? david: basically let's face it, and tom said it earlier, there is a lack of demand in the world. is this demand coming

from? plus you have renewables. the world is changing. the question is, is oil becoming something that people are trying to move away from? we are undergoing a massive change in the world, and this is just something we have seen since the 1970's. the rest of the world is changing, and we will see how it goes. i do not see oil prices going up a long way from here. francine: so this has an effect on petrodollars, right? david: capital accounts, this is the problem people have. they look at world trading goods and services, at $20 trillion a year. it is at six. -- $6 trillion a day, according to a survey. are what matter, not buying product. the dollar dominates that completely. tom: david bloom with us, and we will continue. i want to show a chart here, what francine was alluding to

earlier with headlines from iran. i am not a big one on pie charts, but it tells the story here. iran here, nigeria here. abu dhabi with a little more than you think, the scope and scale of aramco, saudi arabia and iraq. it sort of looks like the thanksgiving turkey. i could make feathers off here and some little feet here as well. you know. francine: as tom is making turkey, i would remind everyone that 10 none opec countries have agreed to these cuts. 10 non-opec countries have agreed to these cuts. cuts johnson has pledged to taxes and boost education. ♪

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i have seen more tweets from the president flying back from the nato meetings than ever before. kevin cirilli will recount a historic day of impeachment and a heated day in washington. right now on the distance from beijing to china, here is viviana hurtado. viviana: the senate defined a would to china and a bell -- a bipartisan the measure to donald trump as soon as possible, china threatening retaliation for two new u.s. laws. drafting warren legislation aimed at megamerger's. the bill would restrict large mergers and reopen old ones going back two decades.

she is likely to face opposition. shinzo abe lying on fiscal stimulus to avert a recession. on fiscal stimulus to avert a recession. the japanese government expect that to boost real growth by 1.4%. the fallout from the sales tax hike is hurting japan. the owner of the new york mets and talks to sell an 80% stake. a deal would value the team at a baseball record, $2.6 billion. he already owns a minority stake in the team. global news 24 hours a day, on air and @quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. francine: one week until the u.k. election, and boris johnson

has unveiled a list of pledges he would roll out if he won a majority. a defense review, more school funding, immigration legislation would be a priority on top of brexit and a taxcutting budget. joining us is joe twyman. david bloom is still with us. you are one of the architects of ande digital revolutions you are the architect of the digital pole that was right in 2017. which pole do we trust? joe: not in terms of right and wrong, but degrees of accuracy. it was the most accurate published and i was involved with that. way ofa complicated doing a geographically varied , but all polling is subject to a margin of error. it is only a snapshot of public

opinion at the time. trends over the last few weeks have been initially an increase in the lead for the conservatives but more recently, a decline in that lead. consistentlytory has been the conservatives will not be on for a majority. there are reasons to think this time it might be different because of the individual complexities with constituencies and the influence brexit could cause. francine: is this an emotional connection to the leader? if you were to redesign a poll, how do you correctly poll? some have the conservatives at 13 percentage points in the lead and some have six percentage points. what is the chance that labour wins a majority? joe: it is a tiny chance, but they do not need to win a majority to go into power because if the conservatives do

not get a majority labour could form a party. a 15% toay there is 20% chance, but there is still one week remaining. on friday, we have the final aaders debate between, and whole weekend of headlines in the sunday papers which may or may not prove to move the dial. tom: we are thrilled to have you on. "the newst 24 hours, york times" has written about leads, england, and the knocking of doors. let's look at the morning must aphael.om therese r the united kingdom campaign seems to be going the prime minister's way, but the polls cannot capture what is happening

at the street level. jobs.ders are not buying largelys are still far -- fought largely by party activists who knock on doors. 44% of tory members said they spent no time campaign versus 33% of labour members, and then a stunning chart on the great age divide. on the knocking of doors at the heart of the united kingdom experience, how does the age divide play in? joe: labour members tend to be much younger, conservative members much older. available of people is much larger for labour than the conservatives. all of the parties have made an effort to knock on doors as often and as frequently as they can in this election because for all the talk of the sophisticated data modeling the parties are doing and the social

media campaigns, there is consistent evidence to show there is still no substitute for human contact. knocking on doors and crucially engaging with candidates and voters, that is massively important. stopped.merica, we the reality is tv, tv. is the political process constrained because you cannot do tv like america, so the only thing left is to go out and knock on doors, and there is some risk to women candidates? is a risk toit women candidates is debatable. the fact that politicians cannot pay for advertising on british television makes an enormous difference, soever the last 15 -- so over the last 15 to 20 years there have been social media websites and viral videos.

impact,at has an parties would be crazy to ignore such techniques, there is no substitute for knocking on doors. decided bywill be the performance of the parties in each of those 650 contests. it is really important that candidates speak to as many people as they can to try and engage those people, because a lot of attention is paid to the parties that people support. another crucial aspect is whether people decide to turn in or not, and the impact conservative held, remain leaning constituencies and labour held leave constituencies might paint a different picture in terms of the seats then we are seeing in the national picture in terms of the votes. francine: do you trust the polls?

in the market, so far looks like a winner and even what the margin of error, the market seems to trust as they did before. even within the margin of error it is showing a conservative majority. there is a lot of upside for sterling. if the exit poll agrees with the polls, the market will think it is a slamdunk and the risks could be boring. if the two are different, we are in for an exciting night. joe: there is a hierarchy of the polls. exit polls are the top, then standard polls. david: it will all be very exciting. tom: really well said. if we get a stronger sterling, that is a good thing for the haves.

what about the have-nots of the united kingdom? if i get strong sterling, have a trust fund i am loving it. if not, then what? david: we spoke about some of the changes, and the transmission mechanism on monetary policy and exchange rate is very weak these days. we are talking about a constant move up to 1.45. assets are worth more. people are going on holiday, and sterling is really cheap because of massive political uncertainty. what we really don't want is another hung parliament and we are back to where we started. sterling is not doing well. the equity market is doing well. bad for jobs. bad for the economy. i want a winner. joe twyman, david

bloom of hsbc stays with us. james bond news, aston martin jumping 9.6% in london trade after an auto car report. newsletterompany or saying that someone is interested in buying a stake in it. aston martin gaining almost 10% on this report that lawrence strohl is eyeing a stake in the luxury car. tom: speaker pelosi will have a statement on impeachment at the 9:00 a.m. our, in about three hours 20 minutes time. in 20 minutes, kevin cirilli will brief us. this is bloomberg. ♪

♪ "surveillance."

good morning, everyone. thrilled you are with us today. moments ago a headline from the speaker of the house, what an interesting day yesterday that we saw, and impeachment inquiry with four leading legal professors, some division there as well. we will see more on that with kevin cirilli at the top of the next hour. yesterday inl conversation with the senator from massachusetts. senator warren: the president has no plan. joe: you have a plan. what is the plan? we need anren: overall strategy on tariffs. trade is about tariffs but not just about tariffs. it is about regulation as much as anything else.

i want to see a coherent plan for anyone who wants access to american markets. i want to ease up so our farmers are not being squeezed like crazy like they are now. we have already lost markets that will be hard for them to regain. a third part i think is important is we need to be working with our allies. we want to have a trade deal with china that is favorable to the u.s.. let's not declare a trade war at the same time on canada, asian allies, european allies. let's get everybody to work together on this to try to get china to follow a reasonable set of rules on trade. joe: if china is hoping to wait out the trump administration or a warrant administration, you would not be willing to lift the tariffs? sen. warren: the point is we cannot keep doing this as one offs. we need a coherent strategy that works with our allies and makes

clear where our long-term interests lie in trade. i want to see trade occur, but i want to see it occur in a way that is helpful to the american worker, helpful to the american consumer. i don't want to see what donald trump is doing, destroying markets and value. humanould you tie china rights abuses to a trade deal? sen. warren: working with our allies, we should be putting a lot of pressure on china and part of it should be diplomatic and part of it should be economic. we need to use all of the tools in the toolbox. tom: an extraordinary interview, and in our next hour, we will talk about senator warren on mergers, private equity, and wall street, really extraordinary. we are thrilled she visited our world headquarters yesterday, and there is a another -- another democratic candidate

named michael bloomberg, owner of bloomberg news. we love that senator warren was with joe weisenthal yesterday. we love the patience of jordan fabian, our white house correspondent at nato. he is taking off the next three weeks to recuperate from nato and the endless impromptu can't press conferences. let's stay on the comments of senator warren. part of her charm seems to be a more narrow group, is the simple idea that she has to get these good intentions through congress. can she do that? jordan: i think it is going to be very difficult. one of those proposal she put forward is this medicare for all idea, and once she got into the nitty-gritty of how she would pay for it, you saw her numbers take a big hit as people started

to question whether the numbers add up and could pay for medicare for all, and credit get through congress. of the uniteddent states is in the executive branch and does not have much time for the legislative branch. thatenator warren all different? you can pontificate about policy but then you have to execute. does she have that ability? jordan: that is the million-dollar question. if you look at her rhetoric on trade, and the other democratic candidates, joe biden for example, what they are saying is not so different from what president trump is saying. they need the u.s. trade deal to work better for the united states. warren is saying we need a coherent plan. i think if you talk to trump officials, they say their plan is using tariffs to get more favorable trade terms for the united states. how is what warren is saying that different from what trump

is saying? we have not heard her elaborate much. francine: do we have any insight into ideally when president trump a phase one deal because it would help with stocks and his reelection? 15, that is the natural logical date where he would want a deal, but he threw some doubt on that at nato. he said, maybe we will wait until after the 2020 election for this trade deal, trying to throw a curveball at china. we heard yesterday from our colleagues they are trying to work towards which tariffs will be lifted by december 15. francine: mixed messages we will try to decipher on the market. jordan fabian. off onand montcler take a potential deal with kering. this was a bloomberg scoop,

saying they were interested, another french company buying an italian one. this is bloomberg. ♪

♪

this is bloomberg "surveillance." it is difficult to concentrate because david bloom was cracking jokes on the break. there is a wonderful chart you sent over from hsbc that shows behavior in em current exchange is changing. was discussing with tom and yourself that transmission mechanisms have changed. how we look at fiscal policies and currency has changed. trade is political, not economic. when em cuts rates, usually em currencies rally, but here we have got the cut in rates in emerging markets, and the currencies are not following. that is a complete breakdown of how things have worked in the past. this is symptomatic of the interest rate differentials. i am not saying we are right and

how we look at things, but we are trying to change our approach on how things work and how we look at things. tom: central banker of the word powell, em hasan not participated. there is an ebb there. does chairman powell have to keep them in mind as he constructs u.s. policy? david: the u.s. always keeps the globe in mind, but first and foremost he has got to worry about the domestic economy. when the mothership is running smooth, all the others can run, but if the big ship goes off course, the others have no chance. he has to keep the big ship on track, the u.s. economy. we have gone from 3% to 2% growth in the u.s., look at the rest of the world. if the u.s. goes down and the fed cuts rates the dollar will go down. no, the dollar will go up

because there is nothing left to buy. that is why i like the dollar. recovery, i will get nailed and i will be completely wrong. that is the risk in my view. tom: david bloom with that stability of dollar and even strong dollar call. he is with hsbc. we have an eventful hour forward, speaker pelosi with a speech scheduled at 9:00 a.m. back athour, a look transactions and going after wall street. , a wonderful conversation in this hour. ♪

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he launches a massive tweet storm on no bribery, no extortion, on the need for fact witnesses. --marine doubt's trump maureen dowd's trump supporting brother. , awaiting the tea leaves of the trade war. as we launch to friday, a grim wednesday. adp report, jobs day tomorrow. will wage growth be robust? from our studios in london and new york, tom keene and francine lacqua. what does boris johnson do today? he is done with nato, did not talk to the president much. now what? francine: the tussle is a trademark. a couple of years ago we understood that is what we

wanted so people would call him by his first name instead of mr. johnson. we are back on track in terms of manifesto. if you look at the polls, a change between him and labour could be thinning. we look at house to house knocking and what that could mean for labour versus tories. raphael with the op-ed of the day. viviana: chinese officials saying they are in close contact with u.s. counterparts on trade negotiations. the ministry of commerce calling for tariffs to be cut as part of the phase one deal. by. negotiators saved december 15 they are confident they can get an interim agreement. nancy pelosi will make a statement on the impeachment

inquiry in about three hours. democrats are hinting at the charges they would bring against president trump and could include abuse of power, bribery, and obstruction. the house judiciary committee questioning legal scholars about the historical grounds for impeachment. entirecans argued the process is flawed. in hawaii, a sailor opened fire at the pearl harbor shipyard. the sailor then killed himself. he was assigned to a submarine that was at the shipyard for maintenance. british prime minister boris johnson making bold promises and if he wins in the next 100 days he will deliver brexit, tax cutting measures, and well jobs. global news 24 hours a day, on air and @quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries.

i am viviana hurtado. this is bloomberg. tom: data check, one screen today, quiet markets. wonderful conversation. upures up 11, dow futures 27. what do you have, sterling? francine: sterling has moved significantly. higherstill a little bit on polls suggesting that expectations are growing for a conservative picture in next week's election next thursday. germany shares lagging a touch after factory orders fell. bloomberg, go to the and francine knows this better than i do, euro-sterling is the major pair. cable with the history across the atlantic, and all you need to know is the idea of the johnson rally, down we go, with

stronger sterling, and getting out near that resistance about 3, 4 months from the brexit date. francine: we are looking at opec to see if they announced a production cut. opec plus is meeting in vienna and we have team coverage on the ground. people are telling us even if there is a sizable cut like 400,000 barrels a day, it would not necessarily remove any oil from the market if people complied. we have a great compliance chart succeededa and it has at's output growth for most of the year. tom: the president left in a modest half from london -- huff in london into four legal professors testifying. noah feldman is truly the great young historian of law in ,merica, a truman scholar,

let's listen. acts constitute impeachable high crimes and misdemeanors and they encapsulate the framers' worry that the president of the united states would take any means whatever to ensure his reelection, and that is the reason the framers provided for impeachment in a case like this one. tom: noah feldman yesterday. professors, one with a republican tone and three with a democratic town. did anything change yesterday? kevin: no, nothing has changed at all. and i spoke with some sources in the senate where i think the attention is starting to turn, they are saying you might have republicans who will be under pressure, susan collins, mitt romney, who will take issue with

the president as they have done for the past several years. in terms of voting to remove or convict the president of these actions, they do not see the calculus changing. is, ise parsing of this impeachment a political process or a law process? which is it to be assembled in washington? kevin: political, absolutely political. last night in talking with some folks to our very inside of the beltway, they have really said that essentially the polling on this as it relates to these key battleground states in terms of the 2020 presidential election, michigan, wisconsin, ohio, pennsylvania, you look at the polling of independent voters and they are shrugging their shoulders. that might not be too consumable for the president's base for the

far progressive movement. in terms of where middle-class workers are on this, they simply view this as more chaos coming out of washington. francine: any insight into what voters want with the trade war? do they want tough talk but a deal, or would they be fine with having a deal after november 2020? c-suitehis is where the is very much not in line with the message of what people are talking about in wisconsin, michigan, ohio, and pennsylvania, is they want to be tough on china. when i talk to folks in the different campaigns, elizabeth warren, bernie sanders, and some of the other front runners, and i talk to the trump campaign sources, they want someone who is tough on china. the president re-upping something he set a couple of weeks ago, there might not be a

trade deal with china until after the 2020 election, something i think the c-suite and markets are coming around to. that has been the chatter for quite some time. the final point i would make is there is much more agreement as it relates to china from a foreign policy perspective on intellectual property, on other issues pertaining to national security in the senate that perhaps there appears to be at first glance. tom: kevin cirilli, thank you so much. we are thrilled to begin an hour of conversation. and not at mott he will join us admati will join us later. luigi zingales, we are thrilled he could join us today. do they do impeachment in italy and europe or is that a uniquely

american process? luigi: it is a uniquely american process. the prime minister in italy can be removed from office -- tom: over an espresso on wednesday. luigi: basically every year, not a big deal. tom: what is going on here to your great work of the measure of plutocracy, whether it is the ,resident or elizabeth warren there is this debate about the haves and have-nots. is that what you see in this election? luigi: certainly that is an important characteristic. money plays disproportionate in american politics and continues to play strongly. people are worried this is too much. the mood of the voters reflect that. francine: how does that change capitalism? how will that change capitalism? luigi: the concern, i had this

concern when i wrote my book in 2012 and even greater today, the rules are made for the few and create more and more disaffection of borders for democracy and the capitalist system. the reaction we see from bernie in england areyn people who want to reject the capitalist system because they do not see it working for them, and they try to vote for people who are more to the left. francine: should we also blame central bankers? luigi: should we what? francine: blame central bankers for this cheap watch. luigi: it seems the central bankers have done what they could with the instruments they had, and since we have a very tot economy, they tried

maintain price stability in a way they can by keeping rates low. i think if they had not done that they would be in a worse situation. what is missing is the political side, the fiscal policy especially in europe. in europe, it is clearly a missing element. tom: you put history in all of your books and i will ask you this question in the modern age of eight ross perot, michael stier, and michael bloomberg. do you look at the money in politics as a tool against the people, or a tool that allows someone to be removed from the ill effects of the political process, they would be above the lobbying? which way does it cut? luigi: the problem is not just billionaires running for office. it is in fact that billionaires

have so much power in policy in general. -- that was the argument people were saying, berlusconi. tom: that did not work out. we will leave it there. luigi zingales getting me in trouble this morning. anat admati with us in a bit. michael bloomberg's founder of bloomberg asand well. good morning. ♪

♪ you are watching bloomberg "surveillance." bloomberg has learned kering is holding exploratory talks with montcler. kering is the parent of gucci. acquiring montcler would help the company keep pace with lvmh, the french luxury giant that agreed to by tiffany. formula one racing lawrence stroll making a bid for aston martin.g -- aston stroll wanted to purchase a controlling stake. aston martin is grappling with struggling sales and lower earnings. that is your bloomberg business flash. tom: we will keep this brief because we did so much on impeachment. luigi zingales with us. it is europe united?

trump and macron, trump and merkel, was there any sense of united nato? was united in making fun of trump. that is the only thing they are united about. when it comes to action, i don't think there is unity and that is the problem of europe, they cannot develop a common defense policy. they cannot develop a common fiscal policy. they are united only in the opposition, not the actions. francine: where does the trade war go next? is this something for 10 years because it is ideological, and where does it leave europe? luigi: i don't think it is just ideological. kevin was right that the only thing the democratic candidates and president trump agree about is to be tough on china. i sense there has been a change in the china-u.s. relationship and there is more a sense of conflict.

also, struggle for dominance of the world. i see this as the common theme for the next few years. my rickm going to do steve's invitation and rip up the script. venice, what a mess. how do they fix it? italians'is the fault. it is a disaster. in 1966, there was a huge flood. i was a little kid but i remember after there was a huge push to save venice. now more than 50 years have gone by and not only nothing has been done, but the biggest attempt to save venice costing 6 billion euros are not even working. tom: you could have spent that on ac milan and maybe they would have won a couple of games. luigi: good point.

francine: let's take a break. luigi zingales stays with us. in search of consensus, oil treads water ahead of today's opec meeting after the surge -- biggest surge in two months. we are live in vienna where the meeting has just started. ♪

♪ francine: this is bloomberg "surveillance, tom and francine from london and new york.

oil holding onto its biggest surge in more than two months as the opec meeting begins. saudi arabia is willing to raise output slightly if others fail to meet their targets. the pricing for the natural petroleum and gas company saudi aramco is expected today. , always great to speak to you. the saudis are telling the rest of opec plus, we will cut if you stop cheating. will they stop cheating on production levels? >> yes, i mean, right now saudi arabia is really under producing compared to its level and it wants everyone else to comply. there is not a lot of people who are not complying. it is a small number requesting from everybody. saudi probably is willing to do more later on. francine: with the eminent

aramco ipo,he saudi does that mean saudi arabia has to carry most of the burden supporting the crude prices because they have too much to lose otherwise? roger: everybody has a lot to lose. what we are seeing in terms of prices, prices have been stuck into this blend between 55 and 65, showing that the whole group is continuing to manage the market is what saudi's are trying to obtain to keep the prices from going further down. it is difficult to push prices harder than where they are now just by managing supply, when demand is very weak. tom: thank you very much for being with us from vienna. the idea of opec is an idea of a cartel. is the cartel in 2019? dhabi, and aabu

bunch of other countries. is it?tel-y roger: opec has always been a large group but a small group that can act in impact the market. it is not that different. what is different this time around is supply has become elastic to prices, meaning if prices are five to $10 higher, we will see more pricing on the market. that is what they have to deal with and contend with, and this is why the prices are remaining in the narrowband. what they are trying to do is more defensive, rather than push prices above what i would call the marginal costs of the united states and what it takes to grow faster in the united states. doncine: given that, where you expect prices in 2020? the firsthink past

quarter, prices will be on the to 65,nd of the band, 55 because we see surplus emerging in the second quarter. question is how much will they act than in saudi arabia, how much they will do in terms of seasonal management and remove more barrels to avoid the big increase. the next two to three months, they are in good shape. the markets are tight, but are not likely to stay like that in 2020. we believe prices will stay in that band on the lower end. tom: thank you so much. aramco i guessdi roadshow announcement, managing as well. we are waiting for that pricing. francine: we are. yesterday we had news they could be priced at the higher end of the spectrum.

if this goes well, will they also list on an international exchange? tom: we will see about the international expansion of what has become a far more domestic issue. webloomberg "surveillance," like to pair really smart people together about the zeitgeist of the moment. admati of stanford n luigi --gales on senator warren stanford and luigi zingales on senator warren. this is bloomberg. ♪

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and now get $250 off when you buy a new samsung phone during xfinity mobile beyond black friday. plus, you can save up to $400 a year. click, call or visit a store today. francine: the french word for marchinghousands are in france as metros and train

services are largely halted, hospitals and schools struggling to remain open. it is a pretty big strike. frenchs haunted previous governments and unions, everyone from doctors to teachers are going on an indefinite strike from today, to oppose macron's plan to reform the pension system. tom: very good. the habit for strikes in france is there, but well worth monitoring. here is viviana hurtado. viviana: the u.s. senate is defying a threat from china, rushing to punish a bill -- ahing china for minority muslim group. threateningy retaliation for two new u.s. laws that support pro-democracy

protesters in hong kong. elizabeth warren is drafting legislation aimed at megamerger's to restrict large mergers and reopen old ones going back two decades. she is likely to face opposition. fiscalabe relying on stimulus to avert a recession. he announced measures over the next years totaling $239 billion. the japanese government expects them to boost real growth by 1.4%. bloomberg has learned the owner of the new york mets is in talks to sell an 80% stake to steve colin. the valley -- this would value the team. after five years, he would take control of the mets. he already owns a minority stake. global news 24 hours a day, on air and @quicktake on twitter,

powered by more than 2700 journalists and analysts in more than 120 countries. hurtado.ana this is bloomberg. francine: democratic presidential candidate elizabeth warren says she is no envy of economysm, but the u.s. is working better for the rich than for the rest of americans. i am a warren: capitalist, but markets without part of those rules are that everybody is supposed to we a fair share on taxes so can reinvested in opportunity for all of our kids, and that is what a two cent well taxes about. the short version is this -- your first 50 million of accumulated wealth is free and clear, but your 50 million and first dollar, you have to pitch in two cents and two cents after that.

bloomberg tve many viewers who suspect you are not a capitalist, and there is a saying if youle are elected, the market will plunge 25%. administration, would the performance of the stock market be something you care about? sen. warren: i care about an economy that works not just for the billionaires and millionaires, but works for everyone. in america, the stock market goes up, gdp goes up, unemployment is low, but what is happening to working families? it has been a generation and there has been very little growth in income. at the same time, families are squeezed for housing, health care, child care, the cost of sending their kid to the school, those are through the roof. families take on more and more debt and are squeezed harder and harder. that is part of why i want to

see a wealth tax. tom: the senator from massachusetts, we are thrilled she joined us. michael bloomberg is a democratic candidate for president, founder and majority owner of bloomberg lp and parent company of bloomberg news. about isveillance" is important combinations of conversations. i will be real direct. this goes back to frank knight in the 1920's and one of the people who survived a knight phd is george stigler. carrying the torch is luigi at ales of chicago, here seminar in new york, and you dragged along admati of stanford. it changes the panel. luigi: it makes me more lively.

tom: senator warren is making it more lively. not only does she want to go back after wall street, but wants to go back into the past. is that fair play? anat: well, i think we should have fair play in the economy. i am not sure about going back to address the mistakes of the past, but there are a lot of changes i have been advocating for a decade that would affect the power, let's say. tom: we talked about the dawn of the gilded age. how gilded are re-, and what is the vector of the gilded age into 2020? anat: we are in a sort of gilded age and we need to correct some of the distortions in the economy and the way it works. andink we have a lot to do this conversation is very good to have, even though it is controversial. francine: is there a country

that has dealt better than others with these distortions? countries --.2 europe, countries in scandinavian countries like denmark. they ride their bikes, we just read. that is good. generally in europe, there is a little bit of a more humane safety net and some more standards for safety issues that markets andur free cause a lot of harm that we have to fix after the fact. you see thisre do conversation going? we started three or four years ago talking about anti-globalization and the role of social media. what conversations what we have in two years from now? luigi: this is a long trend.

when i wrote my book in 2012, i predicted populism was inevitable and this is the form it would take. everybody kind of made fun of me, what are you talking about? since then, the world has changed. i think different forms of populism are prevailing, but i think that elizabeth warren, senator warren is saying something very important. the vast majority of americans have not benefited from the growth in the last 40 years, and this is not sustainable. i think that is the conversation, what do we do about it? people might disagree, but this is a fact we cannot ignore. tom: what is different when you pioneered with this your work in the beginning of the financial crisis, your harshest critics, is that we had a dialogue and a discussion.

it takes a village to maintain a dangerous financial system. how is wall street adapting to the fracture in american society? anat: they go on to attack. that is not useful conversation. tom: jamie dimon would say he is doing philanthropy and providing dollars to the community. anat: oh, please. tom: just getting warmed up. what do you need to see out of the new wall street, whether it is a democrat or republican in 2020, what is the best path for wall street? stop the nonsense and try to have a serious conversation about what is going on, instead of this let me do some philanthropy as a solution to the problem. we need to discuss some of the way the system works. we need to make it more transparent and see where the risk is taken and who benefits.

tom: i looked at the grove yesterday where they had the nato meetings, and it was brought over from private to commercial ownership because of the change in tax laws in the united kingdom a million years ago. let's talk about private equity tax favor on wall street. even some of the most conservative wall street people say it is obviously unfair. do we need to amend the wall street tax system that favors private equity? luigi: the treatment of the carry and private equity, absolutely. this is an old blue paul by bill clinton -- old loophole by bill clinton that should be eliminated. anat: i agree. senator warren is on the fringes of this. she is going down in the polls. i hope she does well.

what do you need to see from the anat admati candidate that will change the behavior of global wall street? from there are pieces shareef brown, who is not running, and some from elizabeth warren. there should be less leverage in this system and secondly, we need to worry about the way compensation structures work and the way it works in this system. we need much better accounting standards. hass a system that incentives for recklessness built into it that we need to unpack the root cause of them. i have specific steps that will take more detail to do, but there is a combination of measures to address directly what the flawed incentives are

that do harm. what you do with things like speed limits. francine: can you talk about the parallels of what we are seeing in the u.s. with europe? it could be the u.k. with brexit or germany and france. luigi: the crisis that capitalism is going through is all over the world, at least all over the western world. there are technological reasons why there is a push to low income inequality. protestsa series of england,rom france to and there has been a lack of interpretation of that protest in a way that is positive rather than distracting. centerleft able to understand and draw this

issue to the table in a way that improves capitalists. i think this is where the system so far has failed, and i hope we will have a change in this direction, able to interpret the discontent in a way that is positive rather than distracting. tom: this has been wonderful, thank you forti, joining us. i have to do earnings. francine says this has to be done correctly. they break out the hong kong results, with all the protests. ofong kong, same-store sales 4% and 3%, which is not that bad given a global slowdown. they look for a colorful extension of the tiffany t, the launch of the men's collection,

the unveiling of the tiffany love fragrance pillars, and a very tiffany holiday campaign. those are the financials of tiffany. this is bloomberg. ♪

♪ viviana: this is bloomberg ofrveillance." the president -- financial group thinks the bank of financial -- bank of japan needs to rethink negative interest rates. deepen the policy may affect relatively the region of

japan. i think the boj should consider the impact of these policies. viviana: he is now looking for revenue growth outside japan because of constraints on domestic banks. antitrust investigation into amazon has expanded. investigators are looking into its massive cloud computing business. the ftc has asked about practices involving the cloud unit. the agency and amazon declining to comment. that is your bloomberg businessweek. tom: single best chart, let's do les and professor zinga professor admati. you did not buy the tax, standard & poor's right here. a wonderful job in your index fund out of the financial crisis, and this is apple as well.

taking a real look at technology, we talk about regulation and all that. are they just too big? aat: usually too big is symptom of some underlying problem. they can get funding too easily in the case of the banks and here, they control too much data and are able to play off a lot of people. tom: do you say monopoly tendencies going back to standard oil? anat: yes, there are certain there is certainly issues of antitrust. francine: will they be broken up? anat: a breakup is kind of a slogan that people use. i think if you take care of some of the symptoms, the breakup happens more naturally. we had conglomerates in the 1980's that broke up on their

own in efficient ways. if you are a monopoly and are able to grow, that is a symptom of something, so breakup by itself, the devil is in the details exactly what you mean. i think size is a sign of the problem. work thatis the hardy you have done on american capitalism. is there a similarity over angst on tech size and what we did with oil and john rockefeller a couple of years ago? luigi: absolutely. tom: there is a parallel? luigi: very clear parallel and now is worse than then. the power of data is enormous and not just on the economic side, on the intellectual side. economists need data to do analysis, and these companies control the data coming give the data only to some economists and not others. tom: do you want to break up

google into the alphabet of new jersey and alphabet of this? luigi: you cannot break up the search engine of google, but you can certainly add more oversight of how they do things. you can certainly breakup facebook and even better, you can force the interoperability for competition. i cannotone lines, if call from at&t to verizon, there are huge network demands. a common waye have to communicate between two competitors, the competition disappears. if i can access my facebook friends through my pinterest account, the problem is solved. francine: thank you both. luigi zingales and annette ed not. -- anat admati.

we will talk about consolidation for montcler from kerry. this is bloomberg. -- kering. this is bloomberg. ♪

francine: a flurry of potential

m and a in luxury. we heard from the chief of montcler saying he is maintaining contact with investors including kering, it has no concrete hypothesis under consideration. joining us is andrea. when you look at montcler, it looks expensive. the share price increased some 10%. how desperate would kering have to be to buy it? andrea: they would have to be quite desperate. it is not just the share price has gone up today, it is performing really well. montcler is a real class act and there is less you can do with it to get a potential high return. it would struggle to increase sales and margins significantly. tiffany isvmh buying

different because you can reshape tiffany. andrea: tiffany needs to be revived, its brand rejuvenated, expanded internationally. you can do some of that with montcler, but it is very well-run. francine: would tiffany be higher end? andrea: you would cut out some of the more premium products and take it more upmarket, so you would be close to some of cartier's ranges. francine: andrea fell stead, thank you so much. david westin and conversation with mary barra at 10:00 a.m. in new york. this is bloomberg. ♪

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not to cut? saudi aramco potentially prices at the high-end of its market range. sen. warren: i'm a capitalist. i believe in capitalism, but markets without rules are fixed. alix: senator warren threatens to break up megamerger's and proposes sweeping changes to big tech and other industries. announcing ae package, the first country to move from qe to fiscal support. heavy news flow leading to some upside in u.s. equities. chinese officials apparently are in close contact with u.s. counterparts on trade negotiations, according to the ministry of commerce. that is lifting the equity market. any bad news, like german factory orders, potentially more oversight on amazon, perhaps a fine for fiat chrysler merger not being priced